The case was dismissed without prejudice at the request of Fatdoor founder Raj Abhyanker, who said that Benchmark and its EIRs — which in 2007 included Nextdoor CEO Nirav Tolia, as well as current Facebook CTO Bret Taylor, who was also named in the complaint — had stolen his pitch for a local social network with neighborhood-level privacy controls.

Nextdoor VP communications Dabney Lawless said her company felt vindicated that the lawsuit was dropped without a paid settlement. “We’ve always said the lawsuit is completely without merit,” she said.

Abhyanker, though, said his fight was not over. He is currently contesting the Nextdoor trademark, and he is hopeful that he can persuade Google to take up the fight, since it owns the Fatdoor intellectual property through its purchase of a later version of the company called The Dealmap.

Further, it came out over the course of my reporting today that Abhyanker also sued Facebook in January over Fatdoor trade secrets; that case has already been dismissed, as well.

That complaint, filed Jan. 20 and embedded below, said Taylor stole various ideas from Fatdoor for broad concepts related to Facebook’s news feed, “Like” button and other products.

Abhyanker told me that the lawsuit and quick dismissal was all part of his litigation strategy to enlist Google to pursue the Fatdoor patents.

I asked Google for comment on the matter, but I doubt it will have much to say.

Abhyanker framed the cases as a fight between a lone entrepreneur and the “incestuous old boys club” of Silicon Valley. “People are afraid to stand up. We stood up and I’m proud of that,” he said.

Making a lay judgment on this particular battle was harder than usual because of the people involved. Tolia and Benchmark had somewhat infamously been sued, and settled with shareholders in a previous start-up, Epinions, after the shareholders were mostly left out of an acquisition deal. Meanwhile, Abhyanker is an intellectual property lawyer, and pursuing patents and trademarks is literally his business.

Raj Abhyanker Facebook lawsuit

Last year, the judge offered Oracle a choice: Accept a judgment of $272 million in damages, reduced from $1.3 billion awarded at trial, or seek a new trial. Oracle says in court filings that it wants a new trial.

The key passage of the two-page court filing reads as follows (the word “remittitur” refers to the judge’s previous order reducing the award):

Oracle has no choice but to elect a new trial, as accepting the remittitur would force Oracle to risk waiving its right to appeal the Court’s decision on the motions for judgment as a matter of law and for a new trial. Oracle’s objective is to obtain clarification of the law and, if it is right about what the law is and what the evidence supports in this case, to vindicate the verdict of the jury and Oracle’s intellectual property rights as a copyright owner. Accepting the remittitur would be contrary to this objective.

And that means that the whole thing starts over again.

Calling the $1.3 billion award “grossly excessive,” U.S. District Court Judge Phyllis Hamilton in February granted an SAP request to throw out the award. Hamilton said that Oracle never proved that it lost enough business to justify so large a judgment.

Oracle had won the award in November, after accusing SAP’s now-shuttered TomorrowNow unit of copying its software without paying appropriate licensing fees. It had been the largest judgment ever in a copyright infringement case.

At trial, Oracle accused SAP’s now-shuttered TomorrowNow business unit of illegally downloading Oracle software and then making several thousand copies of it, in order to avoid paying the relevant license fees that are Oracle’s financial bread and butter. Oracle ultimately won the claim, but then the fight turned to damages.

Lawyers for Oracle had argued that the company’s damages should be tied to the value of a hypothetical license that TomorrowNow would have had to pay for the software, had it been properly licensed. For its part, SAP had argued that, as competitors, damages should have been calculated based on profits lost by Oracle and gained by SAP as a result of the infringement, and as such is in a much lower range than what Oracle argued for.

The case has caused a lot of personal enmity between Oracle and SAP, as well as with Hewlett-Packard, especially during the 11-month period when former SAP co-CEO Léo Apotheker was CEO of HP. Apotheker’s first days on the job at HP were marred by his apparent absence from HP headquarters, in what couldn’t help but look like an attempt to avoid being served with a subpoena. Maybe Oracle will try again.

One thing Judge James Kleinberg did was dismiss a fraud claim by Oracle that said HP had been all sneaky when it concluded a settlement with Oracle that included an agreement to continue building software for systems using the Itanium chip. The settlement was struck only a few weeks before HP hired Léo Apotheker as its CEO and Ray Lane as its chairman.

But that’s not the important part of what Judge Kleinberg did. The most important aspect of yesterday’s action in Hewlett-Packard v. Oracle was the release of the unredacted version of Oracle’s cross-complaint. And it’s a juicy read.

I’ve posted the redacted version before. Now you can read all the bits that were blacked out.

What you’ll find is a lot of information that goes to the core of Oracle’s argument that HP has a lot to lose if the Itanium chip goes end of life, which is exactly what Oracle has said Intel plans to do. As the only major server vendor who sells boxes running Itanium chips, HP makes a lot of money — billions of dollars, according to a newly unredacted statement in the filing — on service-and-support contracts with its Itanium customers. As one HP executive is quoted on page four of the filing, without Itanium, HP would be “strategically screwed.”

Intel, on the other hand, was more or less ready to let the chip die. Having spent billions, dating back to 1989, to develop the Itanium chip, which outside of HP never saw any market success, Intel had to be convinced to keep building them. To do that, HP, the filing reads, paid Intel $440 million to keep Itanium chips in production for a few more generations, through 2014. The deal didn’t even cover the cost of the chips, as HP had to pay for them, as well, the filing reads. Oracle calls the arrangement a “pure pay-off to induce Intel to keep churning out processors that it really wanted to kill.”

And while there’s nothing specifically wrong with the arrangement by itself, Oracle’s point is that HP was misleading the marketplace about the true status of the keystone product in its Business Critical Service business. That unit, in no small part because of the uncertainty wrought by this lawsuit, saw its sales fall by 23 percent in HP’s most recent quarter.

Having won the release of the unredacted complaint, Oracle claimed something of a victory in a statement:

“Oracle is delighted that the Superior Court of the State of California, Santa Clara County, has rejected HP’s attempt to hide the truth about Itanium’s certain end of life from its customers, partners and own employees. We look forward to seeing all of the facts made public that demonstrate how HP has known for years that Itanium is end of life.”

It all sounds very reasonable, until you take into account the fact that Oracle acquired Sun Microsystems in 2010 and is now a big server vendor that competes with HP, and would by no real stretch of argument benefit from an exodus of HP’s Itanium customers toward other vendors. HP called the decision by Oracle to cease support for Itanium part of a “calculated business strategy” to mess up HP’s Itanium business and capture those customers. Yet the evidence so far suggests that the one benefiting from this fight is actually IBM.

HP claimed victory of its own, in a statement:

“HP is pleased that the Superior Court of the State of California, Santa Clara County, has rejected Oracle’s attempt to use a fraud claim to undo its contract with HP. We look forward to seeing the facts made public that demonstrate how Oracle’s March 2011 announcement to no longer develop software for Itanium servers was part of a calculated business strategy to drive hardware sales from Itanium to inferior Sun servers. This further demonstrates the fact that Oracle breached its contractual commitment to HP and ignored its repeated promises of support to our shared customers.”

HP has portrayed itself as the defender of the interests of Itanium customers, under attack by Oracle. As HP puts it in its statement, Oracle tried to induce customers running Oracle software on HP Itanium systems into replacing that hardware by limiting support and withholding software patches and bug fixes. “Customers were left without options to address bugs and other defects in their Oracle software,” HP says.

For HP, this is all a simple argument over whether or not Oracle can be held to the contract they agreed to in 2010.

The agreement stems from the circumstances of former HP CEO Mark Hurd’s resignation, and his subsequent hiring by Oracle as its president. HP sued Hurd and Oracle, and soon they settled. HP says that a clause in that settlement included a provision that Oracle would continue to port its database software to HP servers running the Itanium chip. Oracle has argued that this clause is not part of the final agreement. The settlement document itself remains confidential, but its details will likely emerge in the trial. Expect lots of arguing over different versions of the agreement.

I have embedded two documents below, for your reading pleasure. The first is Oracle’s unredacted cross-complaint, with all the blacked-out bits from the previous version now fully revealed for the world to see. Below that is a Case Management Conference Statement filed by HP lawyers, also unredacted, where it seeks to expose Oracle as making cold-blooded moves that would appear to be attempts to spur Oracle’s own software customers to abandon HP hardware. It’s not quite as juicy as Oracle’s document, but it has its moments, too. Enjoy them both:

HP v Oracle – Amended Cross Complaint

0077a 2011121 Hp Cmc Stmnt Unredacted

Groklaw reported the notifications on Friday. See the full filing here. These patent reexaminations are a routine part of patent lawsuits. One party, usually the one that’s alleged to be infringing, asks the patent office to reexamine the patent and decide whether or not the patent should have been issued in the first place. A rejection isn’t by any means a final nail in the coffin in Oracle’s infringement case against Google. But it doesn’t exactly help Oracle, either.

Oracle has six months to appeal the patent office’s finding, and it can also, as a final step, sue the patent office itself. But these things rarely go that far.

And these rejections are sometimes meaningless to the final outcome of a lawsuit. In 2005, as part of its epic patent litigation against NTP — the case that nearly barred the import of BlackBerry devices into the United States — Research In Motion won several rejections from the patent office, like this one, which I wrote about at the time, only to suffer later defeats in court that led it to pay a $612 million settlement.

Oracle has claimed that Google owes it more than $6 billion for parts of its Java software that were used in the Android mobile operating system; Oracle took over Java after it acquired Sun Microsystems last year. Google has argued that Oracle’s claims for damages are flawed. After face-to-face talks between Oracle CEO Larry Ellison and Google CEO Larry Page failed in September, the trial had been expected to begin in October. But it was delayed, and is now expected to get underway in 2012.

While it makes sense that new CEO Meg Whitman probably wants some fresh blood in the legal office, the move comes at a delicate time legally for HP, as the company is heading into a trial with Oracle over the Itanium affair, not to mention routine shareholder lawsuits stemming from its $11.7 billion acquisition of Autonomy.

While a search is underway to replace Holston, HP said, David Healy, a partner in the Mergers & Acquisition Group at Fenwick & West, will serve in the interim as HP’s general counsel. Healy advised HP on its acquisition of Vertica and the deal to sell its video collaboration assets to Polycom.

Holston is former federal prosecutor who had been a partner at the law firm of Morgan Lewis when then-CEO Mark Hurd brought him in to investigate the messy pretexting scandal that rocked HP in 2006. (Here’s a transcript of Holston in a press conference explaining the firm’s work from September of that year.) In the book on that scandal, Anthony Bianco’s, “The Big Lie” Holston is portrayed as having saved Hurd from having to resign amid the scandal that hit when he was only a year on the job.

A profile of Holston by Fortune’s Adam Lashinsky, described him as Hurd’s “consigliere,” who ultimately had to turn against him when Hurd’s troubles involving a marketing contractor and expense reports led him to resign last year.

HP’s statement is below.

Michael J. Holston to Leave HP

PALO ALTO, CA–(Marketwire -12/12/11)- HP today announced that Michael J. Holston, executive vice president and general counsel, will leave the company to pursue other opportunities.

Prior to his joining HP, Holston supported the company as external counsel for more than 10 years on a variety of litigation and regulatory matters.

“Mike has been an exceptional leader at HP and a great contributor to the company’s mission,” said Meg Whitman, HP president and chief executive officer. “The entire company wishes him well in his future endeavors.”

HP also announced that David W. Healy, partner and co-chair, Mergers & Acquisition Group, Fenwick & West LLP, will act as HP’s general counsel on an interim basis. Healy represented HP on its recent acquisition of Vertica and its agreement to sell its Video Collaboration business unit to Polycom. Healy will oversee all legal activities during the interim period.

The company further announced that a formal search is underway for a replacement. Candidates from both inside and outside the company will be considered.

Oracle paints a picture of HP desperate to preserve the profits it makes on support and service contracts generated from customers using Integrity servers, cutting arrangements with Intel to keep pumping out Itanium chips that no one but HP buys, and which Intel would secretly like to forget in order to focus on its highly profitable line of mainstream Xeon server chips. Oracle describes an agreement between HP and Intel called the “Itanium Collaboration Agreement” and calls it a “a pure pay-off to induce Intel to keep churning out processors that it really wanted to kill.”

Here are some other interesting highlights. Remember yesterday how I said that the main issue, at least from HP’s perspective in this suit, is whether or not Oracle agreed to continue to port its software to HP-UX so that it could run on HP’s Integrity servers that use Intel’s Itanium chip.

HP has argued that when the two companies settled a lawsuit concerning Oracle’s hiring of former HP CEO Mark Hurd, that Oracle agreed to do just that. Oracle has argued that it agreed to no such thing and so is perfectly within its rights to walk way from the Itanium platform.

Pick up the action on page 27. You read how, as Oracle tells it, HP sought to insert language into that settlement that included an Oracle pledge to stick with Itanium, which Oracle rejected twice.

It quotes an email from Oracle General Counsel Dorian Daley to HP lawyers proposing the following langauge in a draft agreement:

Reaffirmation of the Oracle-HP Partnership. Oracle and HP reaffirm their commitment to their longstanding strategic relationship and their mutual desire to continue to support their mutual customers. Oracle will continue to offer its product suite on HP platforms and HP will continue to support Oracle products (including Oracle Enterprise Linux and Oracle VM) on its hardware in a manner consistent with that partnership.

HP, Oracle says, then responded with the following proposed language:

Reaffirmation of the Oracle-HP Partnership. Oracle and HP reaffirm their commitment to their longstanding strategic relationship and their mutual desire to continue to support their mutual customers. Oracle will continue to offer its product suite on HP platforms and HP will continue to support Oracle products (including Oracle Enterprise Linux and Oracle VM) on its hardware in a manner consistent with that partnership. Oracle will continue to support all ongoing versions of HP-UX with Oracle’s relevant database, middleware and application products with the availability, marketing and pricing in competitive terms that Oracle has provided HP for the past five years. Oracle will continue to provide access to the Java technology and tools such that HP can continue to support its operating systems (e.g., HP-UX, OpenVMS, Nonstop) in a manner similar to the way it does today. Oracle agrees to continue to provide Solaris for HP’s x86 platforms in a manner similar to what it provides HP today. Oracle agrees to continue to purchase HP server hardware for internal use at a rate similar to what Oracle purchases today.

Oracle rejected it, and by its account, no mention of Itanium or HP-UX was in the final version of the settlement that both signed. The final version was nearly identical to the draft that Daley proposed above. This sequence of events and what the final version of the agreement actually says will be a key issue in the trial. A lot of the rest of the stuff is a bit of Oracle bluster, though it’s interesting bluster.

For instance, Oracle accuses HP of having “fraudulently induced Oracle to enter into the very contract” at the heart of the lawsuit, by negotiating at a time when people on the HP side would have known that the company was about to hire Léo Apotheker and Ray Lane as CEO and chairman. As Oracle puts it:

“Given the well-documented animosity between Oracle and Messrs. Apotheker and Lane, HP knew that had Oracle known of HP’s imminent plans to hire these individuals, Oracle would not have signed the Hurd Agreement, especially any ‘partnership’ commitments or other business restrictions … unrelated to Mr. Hurd’s move to Oracle. … HP had a duty to disclose this exclusively-held material information. Instead, HP knowingly and actively withheld this information.”

HP naturally isn’t taking the latest round of accusations from Oracle silently. The company just issued a statement basically accusing Oracle of trying to distract us all from the fact that it’s in breach of a contract. And the key phrase in the contract — all that back and forth between the Oracle and HP lawyers above — is this one: “An agreement to continue to work together as the companies have,” meaning work together as they did when Oracle still supported Itanium.

This all started back in March when Oracle said it would stop software development for Itanium. It prompted a lot of shocked and angry pronouncements from HP and Intel and counter-claims from Oracle. Itanium customers then rallied to its defense and sought to change Oracle’s mind. It didn’t work. Months passed, and HP resorted to a lawsuit in June that has seen many colorful arguments, and even the odd pop-culture reference.

HP’s press-release rebuttal is below and the full PDF of Oracle’s filing — complete with all the redactions is below that.

PALO ALTO, Calif., Dec. 2, 2011 – HP today issued the following statement in response to Oracle’s amended cross-complaint in the Intel Itanium litigation:

Today’s filing is another example of Oracle attempting to distract from the undeniable fact that it has breached its contractual commitment to HP and ignored its repeated promises of support to our shared customers.

Here are the facts:

— On Sept. 20, 2010, Mark Hurd, Oracle and HP entered into a written settlement agreement. Pursuant to that agreement, HP dismissed its lawsuit against Hurd, and did not further challenge Hurd’s employment at Oracle. In exchange, Oracle contractually committed that it would “continue to offer its product suite on HP platforms … in a manner consistent with [the Oracle-HP] partnership as it existed prior to Oracle’s hiring of Hurd.”

— Oracle confirmed that it was agreeing to continue to port its software products to HP’s platforms in the same manner as it had done prior to its hiring of Hurd. In an email sent to HP on Sept. 12, 2010, Oracle’s general counsel wrote that this provision was “an agreement to continue to work together as the companies have – with Oracle porting products to HP’s platform and HP supporting the ported products and the parties engaging in joint marketing opportunities – for the mutual benefit of customers.”

— Oracle now claims that this provision does not require Oracle to continue to port its database and other software to HP’s platforms. Yet that is exactly what the contract says, and that is exactly what Oracle committed to do in order to convince HP that Oracle’s hiring of Hurd would not alter the relationship between the companies or be used unfairly to undermine HP’s business.

— Oracle initially tried to justify its Itanium decision by falsely ascribing to Intel the position that Itanium is at end of life. Due to Intel’s unequivocal and repeated statements to the marketplace that Itanium is not at an end of life, Oracle has been forced to revise its rationale.

— In its cross-complaint, Oracle tries to rationalize its Itanium decision by arguing that, despite the undisputed existence of committed support for Itanium that stretches to the end of this decade and beyond, Intel would not have made this commitment to Itanium if it were not for a contractual agreement with HP.

— The existence of such a contract completely undermines Oracle’s stated rationale for discontinuing Itanium support by taking the future of Itanium out of the realm of speculation and firmly establishing as a matter of undeniable fact that there is a committed Itanium roadmap that extends out toward the end of this decade. Oracle has the relevant Itanium roadmaps in its possession, yet it continues to refuse to discuss those roadmaps.

— What has become very clear in the course of the litigation is that Oracle’s claim in March 2011 that it was ending support for Itanium because Itanium was at or near an “end of life” was false and a pure pretext to hide Oracle’s real purpose: to take away the choice of Itanium from customers and restrict the competition faced by its Sun servers.

— Indeed, Oracle’s internal documents make clear that its announcement in March 2011 that it would no longer develop or support software for Itanium servers was implemented as part of a business strategy to leverage Oracle’s dominance in database software to try to force Itanium customers to purchase Sun servers. The tactics employed by Oracle in support of this purpose included pricing misconduct, withholding of benchmarking scores for HP servers run on Oracle software, and abusing customers on support issues.

— Oracle is in breach of its contractual commitments to HP, and it has failed to honor its promises to customers. Oracle should be addressing and rectifying this conduct rather than making up claims against HP.

70777_xREDACTEDxxAmendedxCrossxComplaint

Apple, which argues that Samsung copied the design from the iPad, had already succeeded in persuading a court in Germany to bar the sale of some of its tablets there. The U.S company turned up the heat further this week by asking the same German court to ban sales of a modified Samsung device throughout the entire European Union.

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In a Cisco blog post, the company’s general counsel, Mark Chandler, accused HP of overzealously lawyering up to try to stop former HP employees from going to work for Cisco. The fear is that those former employees will share HP’s confidential information to Cisco’s benefit. “Trade secrets are protected by intellectual property laws, not by non-compete agreements and vague theories that a new job would ‘inevitably’ cause an employee to use trade secrets of his or her former employer,” Chandler helpfully reminded HP’s legal team.

Courts in California have generally held the kind of noncompete agreement that would prevent someone leaving HP for Cisco, or vice versa, to be unenforceable. But one of the people in question used to work for HP in Texas, and moved to California for the Cisco job. HP lawyers, Chandler says, swooped into a courtroom in Texas hours before a related hearing in California (the point being that the court that hears the case first is the one that tends to decide the case).

Chandler doesn’t name the employees involved, but that Texas-to-California move sounds an awful lot like the case of Paul Perez, the former CTO of HP’s StorageWorks, who resigned earlier this month for a job at Cisco; John Marsh, at the Ohio law firm of Hahn Loeser, writes about the case here.

I asked HP for a comment on this, and they haven’t gotten back to me. However, HP is not the only one with aggressive lawyers trying to enforce noncompetes. A federal appeals court recently ruled in favor of HP and an executive it had hired earlier this year from IBM. Giovanni “John” Visentin, who had been a general manager, quit his job at IBM in January and said he was going to HP, but offered to stay on for a transitional period. IBM sued him the next day, and asked the court for an injunction that would have prevented him from taking the job. The trial judge and the appeals court both ruled that IBM’s aggressive behavior made the “emergency” its lawyers said existed worse by its refusal to even talk to the employee.

Chandler closes his post with a promise that the company “will apply California’s rule in favor of employee mobility nationwide,” which is a comfort should you be mulling a job offer from Cisco and work at a rival outfit.

And though the circumstances are different, Cisco is not without its own history of over-aggressive lawyers, as in the infamous case of Peter Adekeye, a former Cisco employee who started his own company servicing Cisco gear; Ars Technica covered the case here. Having filed an antitrust suit against Cisco in the U.S., Adekeye wound up arrested and detained in a Canadian jail. A judge there finally let him out, saying that the only “reasonable inference I can draw from the facts is that the criminal process was used to pressure the applicant (unsuccessfully) into abandoning his antitrust lawsuit against Cisco.”

When it comes to ex-employees, lawyers tend to get really tough.

Update: Like I said, the Adekeye case is different circumstances, and as a Cisco spokesman points out in the comments below, Adekeye is under indictment; though it’s been described as a “ridiculous” case, you sure can’t beat it for weird legal twists and turns.

The document is a routine filing concerning the timing of the trial and the discovery process. In it, Oracle says that what documents it has received from HP confirms what Oracle has been arguing since this whole thing started: That HP and Intel plan to let the Itanium processor die once it has released two more generations, something HP and Intel have both denied. “HP and Intel have a contractual commitment that Itanium will continue through the next two generations of microprocessors …”

Worse, Oracle alleges that the only reason the chip is still available at all is that “HP is paying Intel to keep it going.” It goes on: “HP has secretly contracted with Intel to keep churning out Itaniums so that HP can maintain the appearance that a dead microprocessor is still alive. The whole thing is a remake of Weekend at Bernie’s.”

Why all the trouble over so obscure a chip? Oracle says it’s all about the support fees that Intel charges. HP makes a lot of money, Oracle says, charging for service and support of its HP UX operating system, which runs on the Itanium chip; it loses money when customers move to systems running more conventional x86-based chips. As Oracle puts it in the filing: “HP achieves a far lower “attach rate” (meaning it gets few service contracts) on the operating systems like Linux that are prevalent on servers running x86 microprocessors. Thus when customers migrate to new platforms, HP loses the service contract. This is a multi-billion dollar problem for HP.” It also helps HP remain competitive with IBM and Oracle’s Sun Microsystems business, Oracle argues in a redacted passage.

“These factors led HP to craft a top-secret plan to create a false perception that Itanium still had a future,” Oracle says in the filing. “HP understands that the future prospects of IT products drive customer purchasing decisions. A buyer who knew that Intel saw no future for Itanium, and was only continuing to invest in the line pursuant to a contractual obligation, would devalue the future prospects of Itanium servers and be less inclined to buy.”

“Oracle Sun has been a victim of this, and according to HP’s documents an intended victim. So why is Oracle the defendant in this case? We now understand it is because Oracle’s decision to stop making new versions of its software for the Itanium system was devastating to HP because it undermined the rationale for paying Intel [redacted] to sustain the illusion of a long-term future for Itanium. Oracle had told too much of the truth.”

HP, whose PR team is working equally late, just sent this emailed statement:

Oracle’s latest filing is nothing more than a desperate delay tactic designed to extend the paralyzing uncertainty in the marketplace created when Oracle announced in March 2011 — in a clear breach of contract — that it would no longer support HP’s Itanium platform. The fact remains that Oracle’s decision to cut off support for Itanium was an illicit business strategy it conjured to try to force Itanium customers into buying Sun servers, and destroy choice in the marketplace. This filing is just the latest in its ongoing campaign to shore up its failing Sun server business and starve thousands of existing Itanium customers who rely on their Itanium processors for mission-critical activities.

As Oracle well knows, HP and Intel have a contractual commitment to continue to sell mission-critical Itanium processers to our customers through the next two generations of microprocessors, thus ensuring the availability of Itanium through at least the end of the decade. HP is resolved to enforcing Oracle’s commitments to HP and our shared customers and will continue to take actions to protect its customers’ best interests. It is time for Oracle to quit pursuing baseless accusations and honor its commitments to HP and to our shared customers in a timely manner.

Intel spokesman Chuck Mulloy had no comment, saying Intel is not a party to the lawsuit, and doesn’t comment on confidential agreements it may or may not have with other companies. Intel CEO Paul Otellini has said in the past the Intel has a long-term roadmap for Itanium that goes beyond the next two generations already disclosed.

Since this whole episode first erupted in March, and escalated into a lawsuit in May, I’ve called it a very public fight about a very obscure chip. Oracle, perhaps looking for something new to fight with HP about, said it would cease developing software created for systems using Intel’s Itanium chip, arguing that it looked like it was going to be retired in the near-ish future. HP, which is the only server vendor worth mentioning that sells Itanium-based systems, was horrified, as was Intel, if for no other reason than they spent a decade or two developing it in hopes it would be the superchip of the future.

Then the future arrived, and it didn’t quite turn out that way. Intel rival Advanced Micro Devices found a way to do 64-bit computing that the marketplace liked better, Intel ultimately embraced the same method for mainstream server chips, and Itanium went on to be a specialized niche product. However, those who use it are a vocal bunch. Some of them petitioned Oracle to change its mind. It hasn’t budged.

So now you know the background. The original filing is embedded below, via Scribd. The best parts are in the first several pages. Happy reading.

Oracle Itanium Filing: “Weekend At Bernie’ss

News of the meeting comes after Reuters reported that, after exploring options for the unit, HP has been leaning toward a sale.

HP had shut down its webOS hardware business on Aug. 18, after sales of the much-ballyhooed TouchPad tablet failed to gain traction at major retailers.

The Reuters story listed several potential buyers, representing more or less the wishful thinking of HP’s advisers at Bank of America: Amazon, Research In Motion, IBM, Oracle and Intel.

I can knock two off that list: Oracle and IBM. I’ve checked with sources at both companies today, and they slapped down the idea of buying webOS from HP. Neither company would have anything useful do with it, other than milk webOS for patent royalties.

Intel might have made a sliver of sense, until it walked away from its own Meego mobile OS in September and instead threw in its lot with Samsung on an Android variant called Tizen.

That leaves Research In Motion, which has problems so numerous that an acquisition seems unlikely; and Amazon, whose flagship tablet, coming later this month, runs a version of Android.

The Korean company said it filed on Monday for preliminary injunctions in the Tokyo District Court and in the New South Wales Registry, Australia, to stop the sale of iPhone 4S smartphones in both countries. Samsung also asked the Japanese court to stop the sale of Apple’s iPhone 4 and iPad 2 devices.

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Samsung, which is embroiled in a neck-and-neck race with Apple to become the world’s largest seller of smartphones, is trying to gain an upper hand in a legal battle that started in April when Apple accused it of copying key design elements in smartphones and tablets.

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Calling the award “grossly excessive,” U.S. District Court Judge Phyllis Hamilton granted an SAP request to throw out the award and ruled that SAP should get a new trial for damages unless Oracle accepts her decision to lower the award to $272 million (see the text of the decision below.)

“At trial, Oracle presented no evidence, and did not argue, that it was entitled to a hypothetical license fee because it lost an opportunity to license the works to third parties for the same use. … Thus, Oracle could not reasonably claim that SAP’s infringement diminished the licensing value of the infringed works,” Hamilton wrote in her decision.

Hamilton said that Oracle never proved that it lost enough business to justify a $1.3 billion judgment. “Rather than providing evidence of SAP’s actual use of the copyrighted works, and objectively verifiable number of customers lost as a result, Oracle presented evidence of the purported value of the intellectual property as a whole, elicited self-serving testimony from its executives regarding the price they claim they would have demanded in an admittedly fictional negotiation, and proffered the speculative opinion of its damages expert, which was based on little more than guesses about the parties’ expectations,” she wrote. “At the same time, Oracle urged the jury to disregard evidence of Oracle’s actual customer losses resulting from infringement. Thus, the verdict grossly exceeded the actual harm to Oracle in the form of lost customers.”

Oracle had won the award in November after accusing SAP’s now-shuttered TomorrowNow unit of copying its software without paying appropriate licensing fees. It had been the largest judgment ever in a copyright infringement case.

Lawyers for Oracle had argued that the company’s damages should be tied to the value of a hypothetical license that TomorrowNow would have had to pay for the software had it been properly licensed. For its part, SAP had argued that as competitors, damages should have been calculated based on profits lost by Oracle and gained by SAP as a result of the infringement and as such is in a much lower range than what Oracle argued for.

The case has caused a lot of personal enmity between Oracle and SAP, as well as with Hewlett-Packard’s new CEO, Léo Apotheker, the former co-CEO of SAP. Apotheker’s apparent absence from HP’s headquarters in Palo Alto, Calif., when he first started his job caused some snickers as Oracle proved unable to find him in order to serve him with a subpoena.

Of course the leftover mishegas has a lot to do with the mounting anger apparent in the Oracle-HP litigation over Oracle’s decision to stop supporting Intel’s Itanium chip. As one commenter put it the other day, its not so much about the chip: It’s personal.

Update: SAP just issued a statement: “We are very gratified with the Court’s decision. We believed the jury’s verdict was wrong and are pleased at the significant reduction in damages. We hope the Court’s action will help drive this matter to a final resolution. We are hopeful that this ruling will move the case toward an appropriate final resolution.”

And here’s a statement from Oracle: “There was voluminous evidence regarding the massive scope of the theft, clear involvement of SAP management in the misconduct and the tremendous value of the IP stolen. We believe the jury got it right and we intend to pursue the full measure of damages that we believe are owed to Oracle.”

orcl-sap-090111

Art via icanhascheesburger.com.

But a legal dispute may imperil their pastoral bliss: It threatens to close the only store where Ms. DeLouise can buy food for Star and Holly. Without their special diet, the horses would waste away and turn green.

Star and Holly aren’t real horses. They exist only within Linden Research Inc.’s “Second Life,” an online virtual world where people can fashion a new existence. But while the buying, breeding and riding of horses happens in the virtual world, litigation over them happens in real-life federal court.

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In a nine-page letter to the court, which you can read below, Oracle explained that Page, then a Google president, made the decision to acquire Android in 2005, and that later he participated in the licensing talks that occurred between Sun Microsystems and Google concerning Android’s use of Java. He also participated in further communications with Oracle CEO Larry Ellison after that company acquired Sun last year.

Oracle is also seeking to take a deposition of three other people in the case:

Dipchand “Deep” Nishar: The Wall Street Journal described Nishar as an “unsung Google hero” in 2008 when he left to join LinkedIn as its vice president of product. Oracle cites his LinkedIn profile as saying he “started and managed Google’s mobile initiatives worldwide” from 2005 to 2007. Oracle says that Nishar was involved with the Java negotiations between Sun and Google, and wrote several of the documents that Oracle says are going to prove relevant in the case.

Bob Lee: Currently the CTO at Square, Jack Dorsey’s mobile payment start-up, Lee was before that a software engineer at Google whom Oracle portrays in the letter as having “led the core library development for Android.” Oracle says his testimony “would be relevant both with respect to certain aspects of Oracle’s liability and damages theories,” and that documents Lee wrote, which Oracle expects to produce as evidence, demonstrate an “intimate knowledge of Sun’s licensing practices, which is relevant to Oracle’s claims of willful infringement.”

Tim Lindholm: A former Sun Microsystems employee, Lindholm, Oracle says, created some of the Java technologies at issue in the lawsuit. As Oracle puts it: “He constructed one of the very first Java virtual machines, and came to Google with intimate knowledge of the Java platform architecture.” Lindholm not only built the first Java virtual machine, he cowrote a book on it. “In addition, Mr. Lindholm participated in the negotiations that took place between Sun and Google for a Java license,” Oracle says.

Coming only days after the judge in the case, William Alsup, notified Google that he has some tough questions about some of the underlying facts in the case — there is the awkward fact that Google did initially negotiate both with Sun and Oracle for a Java license and then walked away — this request is Oracle’s way of turning up the heat on Google.

Oracle sued Google last August, saying that Android infringes on Java patents it owns. (Original complaint here.) Oracle recently told the court it thinks Google should cough up $2.6 billion in damages.

Oracle’s letter contains the text of a Google statement opposing the deposition requests, saying the request is late and that deposing Page is a “harassing demand” and irrelevant to the case at hand. “Oracle comes to this Court ‘gnashing [its] teeth’ with an eleventh-hour attempt to cram extra depositions into the last couple weeks of the discovery period,” the statement says.

Google argues that Oracle has already deposed Andy Rubin, Google’s VP of mobile platforms, and Dan Bornstein, whom it describes as the “primary architect” of one of the Java virtual machines at issue in the case. (See Bornstein talk about it in this video from Google I/O in 2008.) These two should meet Oracle’s needs, Google says.

Oracle rebutted that Google has asked to depose Ellison, and that Google had sought to prevent Oracle from deposing former Google CEO and current Chairman Eric Schmidt.

The companies are supposed to have wrapped up the discovery phase ahead of the trial by July 29, but these new requests would seem to push that phase into August and ultimately delay the start of the trial.

oraclevgooglepagedepoletter

The case, which Oracle brought last August, claiming that Google’s Android operating system infringes on Java patents it owns as a result of its acquisition of Sun Microsystems, has been bogged down over what’s called a Daubert motion, which is a pre-trial challenge aimed at excluding the presentation of certain evidence, usually expert testimony, to the jury. As part of the wrangling, in June Oracle said it planned to seek $2.6 billion in damages in the case.

So today, a notice came down from Judge William Alsup concerning some pointed questions that he intends to ask Google. “It appears that early on Google recognized that it would infringe patents protecting at least part of Java,” Alsup writes in the filing, but that Google later abandoned licensing talks because the terms seemed too expensive. He then goes on to ask, “Does Google acknowledge that Android infringes at least some of the claims if valid?” The next hearing on the matter is July 21 and clearly Alsup has some tough questions for Google’s lawyers.

Oracle, which didn’t comment on the filing, has said that Sun had offered Google reasonable licensing terms, but that Google chose to press ahead with Android without a license. Google didn’t respond to a message seeking comment today. But what it looks like to me is that Alsup is trying to get both parties to agree that some infringement took place. If that’s true, then there’s not much left to fight over — aside from the size of the check Google will write. The text of the notice is below.

ORACLE AMERICA, INC.,
Plaintiff,
v.
GOOGLE INC.,
Defendant.
/
No. C 10-03561 WHA
NOTICE REGARDING
ADDITIONAL QUESTIONS
FOR JULY 21 HEARING

In reading the Daubert briefing, it appears possible that early on Google recognized that it would infringe patents protecting at least part of Java, entered into negotiations with Sun to obtain a license for use in Android, then abandoned the negotiations as too expensive, and pushed home with Android without any license at all. How accurate is this scenario? Does Google acknowledge that Android infringes at least some of the claims if valid? If so, how should this affect the damages analysis? How should this affect the questions of willfulness and equitable relief? Counsel should be prepared to address these issues at the hearing.

Dated: July 12, 2011.

WILLIAM ALSUP
UNITED STATES DISTRICT JUDGE

Microsoft’s playbook is nearly identical to the one the company used several years back in trying to convince those making Linux-related products to license Microsoft-owned patents. Redmond claimed that Linux was filled with technologies that infringed on Microsoft’s intellectual property

The Linux battle really heated up around 2006, when the company made a landmark deal with Novell in 2006. That was followed by veiled threats of legal action and a slew of licensing deals struck with companies ranging from software makers Turbolinux and Xandros to hardware makers Kyocera Mita and Fuji Xerox.

With Android, Microsoft announced a deal last April whereby HTC would pay Microsoft for every Android device it sells. Microsoft top lawyer Brad Smith said the HTC deal was designed to send a message to the industry that the company is serious about its Android claims.

“By entering into an agreement with HTC, we effectively signaled we are open for business when it comes to licensing,” Smith said at a dinner with reporters last year.

This past week, Microsoft announced four deals with smaller Android device makers Onkyo, Wistron, Velocity Micro and General Dynamics Itronix.

There are some differences between the current approach with Android and the one Microsoft took vis-à-vis Linux. With Linux, Microsoft generally avoided going the litigation route. It wasn’t until years after it started licensing Linux that it filed its first suit involving Linux-related claims — a suit against GPS maker TomTom that was quickly settled.

In the current situation, Microsoft has gone to court early. Not long after it reached the settlement with HTC, Microsoft announced a suit against Motorola. More recently, the company has sued Barnes & Noble, alleging the bookseller’s Android-based Nook products infringe on Microsoft’s intellectual property.

Also, with Linux, Microsoft was largely alone in seeking patent dollars, save for the SCO Group and its effort to take on IBM. On the mobile side, the patent game is much less clear, with Nokia and Apple also looking to enforce their patent rights on various players — including one another. Apple and Nokia settled their patent spat earlier this year, while Apple has its ongoing suit against HTC and Nokia has also said it sees an opportunity to boost its licensing revenue. Meanwhile, Oracle has sued Google directly over Android.

In a clear sign of how high the stakes are, Microsoft, along with a consortium of other companies including Apple, Research In Motion and Sony, agreed to pay $4.5 billion to buy 6,000 patents from bankrupt Nortel Networks, thereby keeping them out of the hands of rivals, including Google.

The upside this time around could be even bigger for Microsoft. On the desktop, the company clearly makes far more from selling Windows than it does when a Linux device is shipped by someone who has taken a license to Microsoft’s patents.

Depending on how Microsoft does on the legal front, and if it is able to get Windows Phone to take off, Microsoft could end up making more from licensing than from selling its own software, not that it wouldn’t rather have customers than licensees.

One analyst suggests that Microsoft is getting around $5 per Android device from HTC, and Redmond is said to be seeking double-digit royalties from other Android makers. Recent reports in Korea, for example, suggest Microsoft wants $15 per device from Samsung, though the same reports suggest the company might take less per Android device if Samsung is willing to commit to a solid Windows Phone road map.

Microsoft declined to comment on the terms of its deal with HTC or on the royalty amounts it is seeking from others. However, if you are making an Android product, my guess is you have already heard from their lawyers.

The suits appear part of a broad strategy by Samsung to fight Apple’s lawsuit over the design of its smartphones and tablet computers with a barrage of litigation around the world.

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Oracle sued in August saying Android infringes on a bunch of patents related to Java, the programming language that Oracle became the owner of when it acquired Sun Microsystems. The amount comes in a new filing in the case (below, courtesy the Foss Patents Blog which goes into a lot more detail here). Last week word came that Oracle was seeking “billions” but we didn’t know a specified amount.

Oracle has said that Sun had offered Google reasonable licensing terms, but that Google chose to press ahead with Android without a license. For its part, Google has said that Oracle’s estimate of damages is based on incorrect assumptions and is therefore out of whack. Looks like the judge is going to have rule on this one.

Oracle Opposition to Google Daubert Motion

The New York company, which pays a network of scientists and technology experts to determine if a patented invention is truly novel, typically helps big companies after they are sued by patent holders. Now, it is launching a service that aims to invalidate “poor quality” patents before they are asserted in courts.

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One bit of news that caught my eye in particular was in the commentary from CFO Karen Burns:

Our patent cross-license agreement with Intel also contributed to the strength in our GPU business, with one month’s worth of revenue recognized in the first quarter.

Remember if you will that Nvidia and Intel, as I first reported right here, settled a nasty patent litigation in January. The deal calls for Intel to shell out $1.5 billion to Nvidia, and the first payment came in this quarter. How much was it? Exactly $22 million, but as Burns’ comments indicate, it amounted to only one month’s payment, not one quarter’s worth.

Going forward, Nvidia can expect to bring in $66 million a quarter from Intel or $264 million a year. Not huge, but still not bad for a company that did $3.5 billion in sales last year and is on a run rate to do $4 billion this year.

The company also said it expects revenue growth of 4-6 percent compared to Q1, which would suggest sales of $1 billion and change, ahead of the current consensus estimate of $992 million.

It’s as though this week was tailor-made for Bartkiewicz (pictured), who argues that companies in the cloud business–and their customers, too–are in denial about risk. And by risk I mean not the technological possibility that a service may fail to work as advertised, but in the financial liability sense.

In Amazon’s case, there’s not been any real discussion of financial liability. Even though several companies effectively had to pause operations during the period of its outage last week, the only compensation they seem to be getting, at least for the moment, is a credit on their bill for the time that affected systems were offline and an apology. Apologies and billing credits won’t work for large companies. In a case like that, someone, somewhere has to be on the hook financially in the case of failure.

Handing your data over to someone is in a way comparable to handing goods over to a shipping company who promises to get it safely from one place to the other. Something bad can happen along the way, and often does. Trains derail, ships sink or get attacked by pirates. This is why the insurance industry exists. Yes, data is slightly different because it can be copied, but you get the idea.

Anyway, as if on cue, I found in my in-box today a report from Bartkiewicz’s company, CyberFactors, which specializes in risk analysis related to cloud services. It made for very interesting reading: It has estimated the financial costs associated with the Epsilon breach, and the findings should get your attention. The security breach and release of customer data at the email marketing provider has exposed the company to liabilities that could be as high as $225 million. According to CyberFactor’s research, as many as 75 other companies were involved and the total number of affected email addresses may be as high as 60 million.

Dealing with the repercussions of the breach–informing customers about it, making changes to marketing strategies, and so on–could eventually cost those at the affected companies, which included household names like Best Buy, J.P. Morgan Chase, Citibank, Walgreen’s and the Walt Disney Company, as much as $412 million, pushing the aggregate cost of the incident to $637 million. Think about that. The exposure of an email database could wind up costing more than half a billion dollars.

Yet even that isn’t the worst of it. Once you take into account down-the-line costs, such as fines, forensic audits, litigation and loss of business, the total cost could exceed $3 billion. Roughly half of the total costs to the affected companies will occur in the first year after the breach, and the rest will come in the second and third years. Security breaches have a way of costing long after the incident itself fades from the headlines. Cloud companies, CyberFactors argues, are going to have to start thinking more like banks, insurance companies and hedge funds. The cloud is going to have to grow up.

It seems Cameron and Tyler Winklevoss, the Don Quixote twins of the digital age, have tilted at yet another legal windmill unsuccessfully.

So now, after losing another court challenge to overturn a previous court challenge, they’ll have to settle for $65 million.

Actually, $100 million, which is how much shares in Facebook have appreciated since the pair and also Divya Narendra settled with the social networking giant.

Said the ruling from the U.S. Circuit of Appeals for the Ninth Circuit, in part:

The Winklevosses are not the first parties bested by a competitor who then seek to gain through litigation what they were unable to achieve in the marketplace. And the courts might have obliged, had the Winklevosses not settled their dispute and signed a release of all claims against Facebook. With the help of a team of lawyers and a financial advisor, they made a deal that appears quite favorable in light of recent market activity. For whatever reason, they now want to back out. Like the district court, we see no basis for allowing them to do so. At some point, litigation must come to an end. That point has now been reached.

The end? Say it ain’t so! BoomTown, for one, will miss those big lugs.

Not so much Facebook co-founder and CEO Mark Zuckerberg, especially since the pair allege the tech wunderkind stole the idea for the start-up while a student at Harvard University.

After much legal mishegas, they got $20 million and 1.25 million shares at a price of $8.88 each.

And that’s more than enough, said court to the the Winklevii–it’s their eternal nickname in Silicon Valley now–and they can’t back out of a settlement they made in 2004.

As for the specifics, the three-judge panel struck down every Winklevoss argument:

- They said the terms of the Facebook deal introduced after mediation were typical.

- They said Winklevii should have been sophisticated enough to understand valuation.

- They said Winklevii couldn’t use the sealed mediation settlement documents to argue their case.

It’s true, but it’s also sad to see it all over, since all the litigiousness between Zuckerberg and the Olympic rowing brothers has been so dramatic that it was the subject of the almost Oscar-winning movie, “The Social Network.”

But maybe they can go to the Supreme Court! One can dream!

And with their latest loss and all the Google machinating against Facebook, who’s up for a sequel: “Geek Wars: The Empire and the Vii Strike Back.”

In a statement, Colin Stretch, deputy general counsel of Facebook said: “We appreciate the Ninth Circuit’s careful consideration of this case and are pleased the court has ruled in Facebook’s favor.”

Here’s the full ruling:

08-16745